Category: SG Budget Babe

Adding China and Technology Stocks Into Your Investments (+ Review of Syfe’s latest Core Portfolios)

For those of you who prefer to outsource their wealth-building to robo-advisors (like Syfe), would you prefer to be stuck with a limited handful of investment portfolios to choose from, or do you prefer to have a wider variety? 

If you answered the latter, then you may want to check out Syfe and their latest offering, the Core portfolio(s) with 3 portfolio options for you to choose from: Defensive, Balanced, or Growth.

Designed to be your core portfolio (read this for the core-satellite strategy I’ve talked about previously), it will also provide exposure to the world’s second-largest market (China) and the rapidly-growing technology industry in today’s digital revolution. What you’ll get is thus a portfolio with holdings of stocks, bonds and gold across 23 globally diversified markets and over 3,500 companies.

What is in the Core portfolio(s)?

Each portfolio consists of 18 ETFs across stocks, bonds and gold that are managed by Vanguard, Blackrock, etc…i.e. the world’s largest asset managers. The stocks you’ll be invested in include Apple, Microsoft, Tesla, Alibaba, Tencent and many more.

Previously, many investors lamented during Syfe’s webinars that none of Syfe’s portfolios offered exposure to the Chinese market. And if there’s one thing about Syfe that really impresses me, it is how they react and innovate to offer new products that cater to what investors want. I observed this previously when they launched their Equity100 portfolio, and then again when Cash+ came out as an alternative to bank deposits in a time of low-interest rates. Today, they’ve added Core to integrate the secular trends of Chinese growth companies and technology stocks.

Syfe has also integrated their Smart Beta strategy, which tilts towards large-cap companies with growth and low-volatility factors.

So, how is that being pulled off?

In essence, your exposure to China basically comes from 2 main ETFs: the iShares MSCI China ETF (MCHI) and KraneShares CSI China Internet ETF (KWEB). 

That means your funds will be invested into companies such as Meituan Dianping, Pinduoduo, Baidu, Kuaishou…basically leading tech giants that are benefiting from the growth of China’s Internet population, which still has room to grow. China’s Internet population is still only at a 61.2% penetration rate right now vs. the U.S. rate of 89.5%. 

With Syfe’s Core portfolios, you get a pretty significant exposure to the Chinese market. For example, the Core Growth portfolio has a 14% geographical allocation to China, while the Balanced and Defensive portfolios come in at 7% and 4% respectively.

3 portfolios to choose from

Depending on your risk appetite, you can choose between the Growth, Balanced or Defensive portfolio – or even a combination of them.

For instance, if you’re like me and believe that equities will outperform bonds and gold in the next few years (especially given the low borrowing rates coupled with high returns on invested capital in the right sectors), then you may want to go for the Core Growth portfolio, which has 68.8% allocation to equities. 

On the other hand, if you’ve not been able to stomach the volatility in the stock market in the past few months, then you may prefer the Balanced or Defensive portfolio instead.

And if you’d rather have an even higher exposure to equities, there’s always the option to go for a 100% exposure to stocks via Syfe’s Equity100 portfolio instead, or use that as a satellite strategy to complement your Core portfolio. 

Can I DIY instead?

Of course! There’s absolutely nothing stopping you from referencing the ETFs that Syfe has consolidated in their Core portfolios and replicating it in your own DIY portfolio. In the name of transparency, Syfe even openly discloses what they invest in:

But the better question to ask here is, will it be worth my while to DIY?

If you’re not feeling up for the consistent monitoring and rebalancing of your portfolio, then you can always outsource these to Syfe to do it for you. What’s more, their feature of automatically reinvesting your dividends also allows you to compound your gains over time for an even larger return. 

What about fees?

As there are no brokerage commissions, sales charge per transaction or even a minimum investment amount, this makes investing in Syfe’s portfolios more cost-efficient than trying to invest in the underlying ETFs on your own

In fact, most index investors would probably have migrated to robo-advisors like Syfe by now, given the ease, convenience and lower fees involved vs. managing their own DIY portfolio.

Because of the significantly lower fees, you can also apply dollar-cost averaging by setting up a recurring bank transfer to deposit funds into your Syfe portfolio(s) on a regular basis. This is one of the easiest ways to enforce discipline…vs. signing up for an investment-linked plan instead (a lot of advisors are selling these on social media nowadays, which comes with higher fees that eats into your returns).

Can I have more than one Core portfolio?

If you’re having trouble choosing between the 3 portfolio options, the good news is that you don’t have to. 

Depending on your investment objectives, you can select the relevant Core portfolio that fits what you’re looking to achieve. For instance, if you’re investing towards retirement for the next few decades, then the Core Growth portfolio may be a more appealing choice. 

On the other hand, if you’re saving up for a shorter-term goal such as your house downpayment or wedding, then the Core Defensive or Core Balanced portfolio may make more sense for less surprises on your capital.

Here’s an example of how you may use Syfe’s portfolios as part of an overall core-satellite strategy:

If you’re interested to find out more, you can also book a free call with Syfe’s wealth experts for a non-obligatory chat on how this can be customized to your needs.

Is it safe to invest in Syfe?

I get this question a lot, and what I always respond is that you’ve to look at the company’s founders, their financial backing and the answer should be clearer from there.

Aside from being MAS-licensed, Syfe was founded by former UBS Director Dhruv Arora and recently even closed a S$25.2 million Series A funding round. Compared to many of the other robo-advisory platforms, few can boast that kind of credentials, so I’m personally not worried about funds parked in Syfe.

If you’re looking to outsource your investments and start investing via Syfe, don’t forget to use promo code BUDGETBABE to have your management fees waived for the first 6 months (up to your first $30,000). 

And in full disclosure, I’ve opted NOT to include my own affiliate links in this article, so you can be rest assured that I do not receive any benefits whether or not you sign up with Syfe. But if you’re still concerned, feel free to join us in our upcoming webinar on 29 April, 7pm to discuss more details about how the Core portfolios work, and address any questions you may have.

Register for the webinar here.

Disclosure: This article is written in collaboration with Syfe. All opinions are that of my own.

  

Commission-free trades! But is online trading platform moomoo safe?

Costs eat into our investment returns, so it is important that we pick a brokerage that helps us keep our transaction charges low. With online brokerages today like Futu, you can now get a free Apple (NASDAQ:AAPL) share + other freebies with moomoo when you open your account before 30 April 2021.

If this is your first time hearing about moomoo, they’re the global version of China’s Futubull (富途牛牛). Widely used in China and Hong Kong to gain access to the HK and US markets, Futu Holding Limited has over 13 million users worldwide, so it was exciting to hear that they’re finally coming to Singapore!

How many of you remember our earlier years of investing, where we had limited options for brokerages in Singapore and had no choice but to pay $20 – $25 per trade?

Coupled with minimum lot sizes (which used to be 1000 shares per SGX counter back in those days) and the importance of keeping our investment costs under 1% (given that paying just 1% could result in us giving up 1/3 of our wealth!), it was no wonder that most beginners would struggle to start their first stock portfolio with anything less than $10,000.

Today, that has all changed. Thanks to the emergence and innovation of online brokerages, we can now say goodbye to high costs…and hello to better UI/UX, platform features, and even free trading data and charting tools!

This has lowered the barriers for anyone to start investing or trading, and has made it more accessible for retail investors – even younger investors with smaller starting capital – to start. 

And now, there’s a new online brokerage player in town: Futu.

Perks of moomoo

Aside from its low fees, there’s a lot to like about both their desktop platform and mobile app for trading. Here’s a quick screenshot of my desktop version, where you can see there’s various tools offered that most brokerages do not normally provide for free, including:

  • Market depth (aka Level 2 data)
  • Trading and charting analytics
  • Conditional alerts via their “AI monitor” to auto-alert you when there’s significant movements in price or indicator(s)
  • Premarket and post-market trading access for US stocks (including live quotes and trading volume)

  • Capital inflows into a stock

  • News










and more. Those of you who trade frequently should find many of these tools useful in your analysis.

As I was among the early users of the app to test it for you guys, I had to deposit in USD back then because SGD transfers weren’t ready yet. Even then, I found it compelling enough to do so for the promise of a year’s worth of commission-free trades and 1 free Apple share (worth about USD 130). Today, you guys are luckier – because you can now transfer directly to their DBS account in SGD.

Oh, and if you’re wondering,

Q: How long did will it take for my deposit to show up in my moomoo account?
I transferred on a Sunday, and could already see it in my account on Monday.
Do note that moomoo users will have to transfer funds from their personal bank accounts (transfers from third-party accounts, joint accounts, e-wallets and cash transfers will not be accepted) to prevent money laundering, and you will need to state your moomoo ID in the transaction reference or comment.

Q: How long does it take to receive the free AAPL share?
Mine took 3 – 4 days to show up. Yours might be faster, as the team has added resources since to help cope with the overwhelming demand.

Q: Are you sure the AAPL share is legit? I don’t believe it!
Here’s a screenshot of mine 😉 At the time they credited it to my account, the Futu SG team had to buy it for USD 135, too.

HISTORY OF moomoo

Futu (the company – Futu Securities International) has been around since 2012, and was founded in Hong Kong. 

Its founder is Leaf Li Hua, who was an early key executive of Tencent (its 18th employee, to be exact). He was one of the earliest developers of QQ, and held many of Tencent’s domestic and international patents. 

For those of you who are Tencent fanatics like me, you might find his name familiar 😉

After he became financially free from earning his first pot of gold from Tencent’s Hong Kong IPO (employee shares, lucky guy!), Leaf achieved FIRE and took a break to be a stock investor to manage his wealth of HKD 4 billion, which translates to a grand total S$693,976,507 in 2007!

He was a trading junkie of Hong Kong stocks at that time, but struggled with the trading software provided by Hong Kong securities firms at that time. What’s more, if one wasn’t paying enough attention, a little carelessness could easily lead to capital loss. 

That was when he realized a big problem existed in the Hong Kong stock market: it was not only difficult to open an account, but there were also challenges with accessing capital, poor UI of most trading software…and very high fees. He saw first-hand that many people were trading via the banks, where they couldn’t see real-time costs, news nor charting information (unless they paid for a separate charting software – Singaporean investors, remember the time we did this too?). 

So as a product person, you can imagine what he did next.

That’s right – he came out of FIRE and swore to make investing simpler by lowering the barriers for people to enter the financial markets.

Leaf saw a gap and worked to bridge that, thus becoming the first to integrate everything into a single app and bring it to the Hong Kong market. It was such a great product and innovative solution that it also attracted prominent investors – Tencent Holdings, Matrix Partners and even Sequoia Capital!

As a result, it successfully bridged the Chinese investors in mainland China with the stock markets in Hong Kong and the US, through Futu’s online and mobile app called NiuNiu (富途牛牛).

It is also worth mentioning that their founding Chief Technology Officer, Weihua Chen, was previously in charge of Tencent’s WeChat security, maintenance and big data areas before coming over to Futu.

The global version was launched not long after, and that’s moomoo for you.

The company is also listed in the US, and I regret not having invested in them sooner. Just take a look – the share price has gone up by 500% since!


Is moomoo safe?

Well, you can be reassured that Futu is not an unlicensed or unregulated brokerage who simply appeared out of the blue.

The company’s Singapore subsidiary received its license from MAS to expand to and operate locally. Aside from that, its U.S. subsidiary is also a member of the Financial Industry Regulatory Authority.

What’s more, U.S. securities in your account are protected up to $500,000 by Securities Investor Protection Corporation (SIPC). 

A reader privately confided in me over an Instagram DM that he was worried about opening an account and transferring his hard-earned money into moomoo. I answered him with this:

With over 21 billion dollars of market capitalisation right now, what do you think will happen if moomoo chooses to run away with your $2,000? As long as word gets out on social media that they’re not a reliable brokerage, what do you think will happen to all that $21B of equity that they currently have? I personally don’t think that my $2,000 is more precious to them than their reputation, especially when they’ve worked so hard for close to a decade to establish themselves in China, Hong Kong and worldwide. And their growth explosion is only just getting started.

Futu primarily generates its revenue through fees and margin financing – NOT on your deposits. Thus, how likely are they to run away with your money…at risk of sending their global expansion plans to an immediate halt once word gets out, and have you and everyone else stop using their platform right away? You decide.

I will also leave you with Leaf’s public statement at Futu’s IPO listing ceremony:

去看远方更美丽的风景 i.e. this is only the start. We are in it for the long run, where there’s a better view (reward) waiting.  

So that’s why I’m not afraid after understanding their history, and I hope it provides some reassurance to you guys who weren’t familiar with them before, too.

How do I sign up for moomoo?

Now that you know moomoo is completely legitimate, don’t miss out on this chance to claim the following freebies:

  • a FREE APPLE (NASDAQ:AAPL) SHARE (limited to first 10,000 clients)
  • SGD 30 cash coupon
  • 90 days of commission-free trading in US, HK and SG stock markets
  • unlimited access to US Level 2 market data
  • free real-time quotes for US options
All you’ll need to do is deposit a minimum of SGD 2,700 (USD 2,000) after you have registered and opened a trading account with Futu SG via moomoo.

Once you’re all set up, you will be able to trade HK, US and SGX stocks on their platform easily. I’ve already tried it out first to check on its safety, reliability and to make sure that they delivered on their promises, so I can confidently tell you now that I’ve received everything they said we retail investors would get without any issues. For fees, click here for more details. 

You’ll also be able to trade HK, US and SGX stocks after their official launch, so don’t miss out.

Click here to sign up now!

TLDR: I was pleasantly surprised and liked what I see, so I’ll continue to use moomoo. Until then, do give them a try – you might find that you like what you see as well!

Disclosure: This post is sponsored by Futu Holdings. All opinions (and money deposited) are that of my own.

The 3 Wealth Levels – Where Are You Right Now?

What is your level of financial freedom? While this is most measured quantitatively, there has been more discussions in recent years on the emotional freedom that money can bring you. Stewart Butterfield, founder of Slack and Flickr, introduces hi…

Learn how to invest in Dividend Stocks – Dividend Machines 2021

If you want to receive passive income in the form of dividends, here’s how you can learn to do it.

Dividend investing is sexy. It is also one of the easiest forms of investing, as you simply need to identify good dividend-paying companies and assess the sustainability of the dividends for the years to come.

It requires less work than value or growth investing, and seeing the money flow into your account on a regular basis certainly feels shiok. 

As long as you learn how to avoid the dividend traps, that is.

With income investing, you basically invest in companies that already have the financial ability to pay you consistent dividends year after year after year.

It doesn’t matter if the company doesn’t grow as fast as you like, or fails to meet earnings estimates, or temporarily falls in stock price…because you’re still getting paid.

And unlike investors who are looking to double their investments in 3-5 years, income (or dividend) investors are happy netting a 5% to 15% p.a. in cash back from their stocks.

But why stop there? Go one step further and learn how to identify stocks that give you BOTH dividends AND capital appreciation over time.

The simplified steps would be to

  1. Learn how to do dividend investing
  2. Create a watchlist of stocks, and buy at opportune moments
  3. Monitor + collect dividends + be grateful!
But the hard work is in step 1, where you’ll have to learn stuff like 

Because we’re in Singapore, you can’t miss out on Real Estate Investment Trusts (REITs) either, as they provide substantial yield on a recurring basis to those who know how to tap on them. But even though we also invest in REITs for dividends, analysing REITs are an entirely different ball game from other dividend stocks. You’ve got to consider factors like the REIT’s sponsor, management, cost of debt, and more.

If that’s confusing you, don’t worry. There’s an easier way out.

Designed by the legendary investors who run The Fifth Person, Dividend Machines is their most popular course, and which I first signed up for back in 2015. It has had a significant impact on how I do my dividend investing, and I highly recommend it to anyone who’s looking to build a dividend portfolio of their own.

Because it is a lifetime membership, my one-time payment back then has allowed me to constantly go back for revision and keep up with the course updates for free.

The good news is, Dividend Machines is now back for its 2021 intake and you have 7 more days to register before it closes.

If you miss this year’s intake, you’ll have to wait until 2022 again.

As many of you long-time readers would know, I don’t recommend courses readily – so when I do, it speaks volume about the quality. This is a course I paid for with my own money all the way back from 2015, and have no regrets.

The best part is, you even get a money-back guarantee. But I doubt you’ll use it, because there’s hardly any reason to not like this course, especially when you consider how much value and free tools / freebies they’re giving to all members together with your lifetime access.

With love,
Budget Babe